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United States v. Merkosky

December 9, 2008

UNITED STATES OF AMERICA PLAINTIFF,
v.
RONALD MERKOSKY DEFENDANT.



The opinion of the court was delivered by: James S. Gwin, United States District Judge

OPINION & ORDER [Resolving Docs. 99, 101, 120, 121, 123, 128, 130.]

On January 14, 2008, Defendant Ronald Merkosky filed a motion to vacate, set aside, or correct his sentence pursuant to 28 U.S.C. § 2255. [Doc. 99.] With his motion, Merkosky seeks relief from the judgment and sentence that the United States District Court for the Northern District of Ohio imposed following his conviction on one count of possession and distribution of pseudoephedrine in violation of 21 U.S.C. § 841(d)(2) -- subsequently re-codified as 21 U.S.C. § 841(c)(2) -- and one count of furnishing false or fraudulent sales records in violation of 21 U.S.C. § 843(a)(4). [Id.] Further, Defendant Merkosky has moved for an evidentiary hearing on his § 2255 motion. [Doc. 101.] The United States, as Plaintiff, moves to strike Defendant Merkosky's § 2255 motion, arguing that it was not properly formatted and exceeded the allotted number of pages. [Doc. 104.]

On October 29, 2008, Magistrate Judge James S. Gallas filed a Report and Recommendation that recommended the Court grant in part the Government's motion to strike Defendant Merkosky's § 2255 motion to prevent consideration of Merkosky's brief after page 30. [Doc. 120 at 18.] The Magistrate Judge also recommended the Court deny Defendant Merkosky's motion to vacate, set aside, or correct his sentence pursuant to 28 U.S.C. § 2255 and his accompanying motion for an evidentiary hearing. [Id.] Merkosky has objected to the Magistrate Judge's Report and Recommendation. [Doc. 121.] The Government responded to Merkosky's objections, [Doc. 123.], and Merkosky rebutted the Government's response, as well as moved the Court to hold recommendations in abeyance pending appeal. [Doc. 128.]

For the reasons provided below, the Court ADOPTS the Magistrate Judge's Report and Recommendation and GRANTS in part the Government's motion to strike and DENIES Defendant Merkosky's § 2255 motion and Merkosky's motion for an evidentiary hearing. Further, the Court DENIES as moot Merkosky's motion to hold recommendations in abeyance pending appeal.

I. Background

In this § 2255 action, Defendant Ronald Merkosky challenges the constitutionality of his conviction by the United States District Court for the Northern District of Ohio under the Fourth, Fifth, and Fourteenth Amendments. The Defendant claims that he was convicted based upon a criminal investigation conducted by a federal employee posing as a federal law enforcement officer in violation of the Fourteenth Amendment, that the search warrant affidavit was submitted with reckless disregard for the truth in violation of the Defendant's Fourth Amendment rights, and that the indictment contained false and fraudulent material information in violation of the Defendant's Fifth Amendment rights.

On May 8, 2002, Defendant Ronald Merkosky was indicted in the Northern District of Ohio on three counts: (1) conspiracy to distribute a mixture of substance containing a detectable amount of pseudoephedrine in violation of 21 U.S.C. § 846 and 841 (d)(2) (subsequently re-codified as 841 (c)(2)); (2) possession and distribution of pseudoephedrine in violation of 21 U.S.C. § 841(d)(2); and (3) furnishing false or fraudulent sales records in violation of 21 U.S.C. § 843(a)(4). [Doc. 99, Att. 1 at 1.]

These charges arose out of Defendant Merkosky's sale of products containing pseudoephedrine, "an active ingredient in weight loss products and over-the-counter medications for the treatment of asthma and nasal congestion." United States v. Merkosky, 135 Fed. Appx. 828, 830 (6th Cir. 2005). Merkosky, the president of National Novelty Corporation located in Painesville, Ohio, had applied to become "a registered wholesale distributor of products containing pseudoephedrine, a List I chemical whose distributors are required to register with the Drug Enforcement Administration ("DEA") because the substance is widely used in the illicit production of methamphetamine, a controlled substance." Id. In response to his application, DEA diversion investigator Janice Margreta met with Merkosky to discuss the issues involved with the distribution of pseudoephedrine and to explain the relevant record-keeping requirements. See id. at 830-31. Specifically, Margeta told Merkosky that "he would be required to keep a record of all purchases and sales of pseudoephedrine exceeding specified threshold amounts[] and to keep internal records of customer lists and customer records for the DEA." Id. at 831. Following this meeting, "Merkosky was approved to distribute pseudoephedrine and a DEA Certificate of Registration was issued to National Novelty in December 1997." Id.

In the spring of 1999, Defendant Merkosky requested that DEA agent Michael Malasky and his supervisor meet with Merkosky at his place of business in Painesville. Id. Merkosky told the agents that "some Arab store owners were asking him to sell them increasingly greater amounts of pseudoephedrine, but he did not give the DEA the names of any these store owners." Id. Agent Malasky indicated to Defendant Merkosky that if he had a problem with an individual store owner, he should give the agents the owner's name, and the agents would visit that owner. Id.

Shortly after this conversation took place, agent Malasky received a letter from Washington that contained a "suspicious activity report." Id. The report indicated that some of the products containing pseudoephedrine that had been shipped from Painesville "had been seized from a methamphetamine lab in a body shop in Pasadena, California." Id. Agent Malasky subsequently went to National Novelty to examine its records and determined that National Novelty had purchased a product called "Mini-Thins" from its supplier -- Body Dynamics, Inc.("BDI") -- that bore the same lot number as the pseudoephedrine products confiscated from the methamphetamine lab in California. Id. After interviewing many of Merkosky's customers, agent Malasky contacted Merkosky and asked him whether the records Merkosky "had supplied to the DEA reflected all the pseudoephedrine he had purchased and sold. Merkosky eventually admitted to Malasky that he had purchased and sold quantities of pseudoephedrine from Auburn Pharmaceutical as well as from BDI, and he provided Malasky with those sales records." Id.

On September 23, 1999, in accordance with a search warrant covering Merkosky's place of business, house, and personal property, agents seized documents, sales invoices from BDI and Auburn Pharmaceutical, and six computers. Id. Merkosky's invoices that were seized by the agents were not consistent with the invoices that the DEA had received from Auburn Pharmaceutical. Id. A subsequent investigation of Merkosky's records revealed "that a significant number of sales reported in [the] records were to customers who had either never done any business with Merkosky or National Novelty, had made purchases of pseudoephedrine[] but not in 1999 as the records reported, or had purchased pseudoephedrine from Merkosky, but in much smaller quantities than those listed in his records." Id.

At trial, Defendant Merkosky put forth the defense that he sold products containing pseudoephedrine to "buying groups," or to retailers who would purchase large quantities of the products and then resell them in smaller quantities to other retailers. Id. Thus, Merkosky claimed that "the discrepancies in National Novelty's records were due to his attempts to comply with the DEA's requests that he keep records of the sales to secondary retailers, not the original buying group . . . . ." Id. at 831-32. Merkosky also contended that his wife, LaVonda Merkosky, and a salesman named Paul Phillips were responsible for maintaining National Novelty's records, and, as a result, Merkosky could not vouch for the correctness of these records. Id. at 832.

On August 7, 2002, a jury found the Defendant not guilty of count one -- conspiracy to distribute a mixture of substance containing a detectable amount of pseudoephedrine in violation of 21 U.S.C. § 846 and 841 (d)(2) (subsequently re-codified as 841 (c)(2)). [Doc. 99, Att. 1 at 1.] Merkosky was found guilty of counts two and three -- possession and distribution of pseudoephedrine in violation of 21 U.S.C. § 841(d)(2) and furnishing false or fraudulent sales records in violation of 21 U.S.C. § 843(a)(4). [Id.] Subsequently, the Court sentenced Merkosky to 135 months of imprisonment on count two and 36 months of imprisonment on count three, to be served concurrently. [Id.] The Court also ordered a term of supervised release for a period of three years. [Id. at 1-2.]

In first appealing his convictions to the Sixth Circuit, Merkosky argued that (1) there was insufficient evidence to support the convictions; (2) the mens rea component of 21 U.S.C. § 846 was unconstitutionally vague; (3) there was prosecutorial misconduct in the closing argument; (4) the sentences were improperly calculated; and (5) there was a denial of due process from the prejudicial delay in bringing the charges. See Merkosky, 135 Fed. Appx. at 830. The Sixth Circuit concluded that only Merkosky's sentencing challenge was meritorious, holding that Merkosky's sentence violated the standards imposed by the intervening decision in United States v. Booker, 543 U.S. 220 (2005). See id. at 836. As a result, the Sixth Circuit affirmed the judgment of the Court, but remanded the case to the Court for re-sentencing. Id. at 837.

The Sixth Circuit issued the mandate regarding Defendant Merkosky's re-sentencing on July 8, 2005. [Doc. 55.] Merkosky then filed his first motion to vacate, set aside, or correct his sentence pursuant to 28 U.S.C. § 2255. [Doc. 69.] The Court dismissed this motion without prejudice for lack of jurisdiction, as Merkosky was not under sentence at the time that he filed this motion. [Doc. 86.] Subsequently, the Court re-sentenced Merkosky; the Defendant successfully appealed his sentence and the Court sentenced him for a third time. See United States v. Merkosky, 237 Fed. Appx. 66 (6th Cir. 2007); see also [Doc. 89.] Currently, Merkosky's third appeal is pending in the Sixth Circuit. This third appeal concerns the Court's denial of Merkosky's motion for production of evidence and granting of the Government's motion to quash. [Docs. 88, 90, 93, 94.]

On January 14, 2008, Defendant Merkosky filed his second, pro se motion to vacate, set aside, or correct his sentence under 28 U.S.C. § 2255. [Doc. 99.] Previously, Merkosky had filed a motion requesting that he be allowed to file a brief in support of his second § 2255 motion that would exceed the 20 page limit. [Doc. 88.] The Court allowed Merkosky to file a supporting brief that was 30 pages, 10 pages over the stated page limit. [Doc. 92.] Merkosky's actual brief, however, was 51 single-spaced pages in length. [Doc. 99, Att. 1.] After filing his second § 2255 motion, Defendant Merkosky also filed another motion requesting an extension of the local rule page limitations, stating that "given the numerous complex issues and documents involved . . . it was impossible to stay within the limitations" set by the local rules and by the Court. [Doc. 100.]

After the Government filed a motion to strike Defendant Merkosky's second § 2255 motion and his memorandum in support because of his failure to comply with the Court's order and local rules governing spacing and page limitations on January 16, 2008, [Doc. 104.], Magistrate Judge James S. Gallas issued a Report and Recommendation in which he recommended the Court grant in part the Government's motion to strike Defendant Merkosky's § 2255 motion to prevent consideration of Merkosky's brief after page 30. [Doc. 120 at 18.] The Magistrate Judge also recommended the Court deny Defendant Merkosky's motion to vacate, set aside, or correct his sentence pursuant to 28 U.S.C. § 2255 and his accompanying motion for an evidentiary hearing. [Id.] The Defendant objected to the Magistrate Judge's Report and Recommendation. [Doc. 121.] The Government responded to ...


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